Expert Financial Advice Blog

Small Business Tax Credits: Know the Red Flags

Taking the home office deduction can also draw IRS attention. Keep in mind that the office must be used regularly and exclusively for conducting business. If you have a qualifying home office, you can deduct related expenses for that portion of your home, including real estate taxes, mortgage interest, utilities and insurance. Here’s a costly small business mistake: Using the payroll taxes that are withheld from employees to pay for business operations instead of sending them on to the Internal Revenue Service. If you don’t submit those taxes to the Service, you could be subject to criminal and civil sanctions including penalties and fines. Another big stumbling block for small businesses: improperly classifying an employee as an independent contractor may result in to paying penalties and back payroll taxes.

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Members of the Dallas-Fort Worth Financial Planning Association answer your financial questions. The Texas Society of CPAs is also posting personal finance tips.